That's exactly what happened with me too. Iplayer worked great, even over 3g was good, but wifi was near perfect. Then last week it just stopped working. Only the sound plays and the video either goes black from the start or displays only the bbc ident image(eg a big 2 when a bbc2 program).

The BBC have done some updating according to their website, saying they are introducing hardware acceleration to all their programs, so it might not just be down to n900.

Strangely though, the watchlive page on the BBC still works, even slightly better since PR1.2.
If you cannot load any iplayer videos give that a try and see if it works for you.... http://www.bbc.co.uk/bbctwo/watchlive/